Residential vs Commercial Hard Money Loans

Are you wondering what the difference is between Residential vs commercial hard money loans? Look no further because we’ll help you out in this informative blog post that should answer all of your questions. (And if you have any more questions, feel free to reach out to our friendly and helpful team at (951) 200-4156!

Real estate investors acquire properties, they fix them up and either sell them or rent them out to tenants. This sounds like a great strategy to make money (it is!) but the problem is: it can be VERY capital-intensive, which means it can take a lot of money to run and real estate investing business – and that ties up your money for a while (and what if you need that money?)

Worse yet, investors discover that they can only grow so far using their own capital. Even if you don’t mind your money being tied up, you can only do so many deals at once. If you want to grow, you need even more money.

That’s why many investors are turning to hard money loans as a source of capital to help them. A hard money loan is a special loan for investors to help them acquire properties and renovate them.

Perhaps you’ve been researching hard money loans and are wondering what the difference is between residential vs commercial hard money loans, and which one is right for you.

The answer is that it depends on a lot of situations, but here are some general rules of thumb to help you…

It partially depends on the end-use of the property. Is the property going to be a place for people to live? Or will they be working there? In general, if someone is going to be working on the property, it’s very likely a commercial loan. If someone is going to be living there, then it could be a residential or commercial loan…

If people are living on the property, then it comes down to the size of the structure. A single family home, or perhaps a duplex or triplex, might only need a small amount of repairs so a smaller loan is necessary. This will end up being a residential loan. However, if it’s a large multi-family unit, such as a condo or apartment building, then it will probably be a commercial hard money loan.

Other factors that could determine whether it’s residential vs commercial hard money loan include: whether it’s a new development or a smaller renovation of an existing property; whether it’s a structure or an set of structures (such as a mobile home park), and what the end use will be (such as if you’re renovating a house to be a retirement home for several non-related renters).

Summary

Which do you need? Residential vs commercial hard money loans? It depends on a lot of factors so be sure to reach out to us and tell us about your project and we can tell you what kind of loan will help you the most.

Need hard money for your real estate investment? We make hard money loans. Click here now and fill out the form or call our team at (951) 200-4156

iwsprop25

About iwsprop25

Mr. Val Falcon is a former US Marine, recognized with multiple awards for outstanding leadership and drive. He has traveled to various Countries around the world serving our Country and learned that the only failure is quitting. After exiting the Marine Corp with an Honorable Discharge he worked 24 years in Law Enforcement. He was then hired by a Fortune 500 Company conducting investigations in Risk Management. Mr. Falcon then began investing in real-estate and works hard to help homeowners and others solve their Real Estate challenges. He will buy properties and offer various solutions so they can move forward in these tough economic times.
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